Stephen L. Deschenes has been named senior vice president and general manager of the Annuities Division for the U.S. operating unit of Sun Life Financial, the company announced Friday.
Deschenes will oversee the annuity business line, working with the company’s marketing, actuarial and distribution departments. He will begin this new role on June 8, 2009, according to a press release.
Deschenes joins Sun Life from MassMutual Financial Group, where he served as senior vice president and chief marketing officer for the Retirement Income Group. Prior to joining MassMutual, Deschenes served as executive vice president for Fidelity Investments.
“Steve is a proven leader with a successful 23-year track record in setting strategic direction and driving results in highly competitive markets,” said Wes Thompson, President, Sun Life Financial U.S., in the announcement. “The challenging economic environment is increasing consumer awareness of the need for retirement income solutions….”
Deschenes graduated Magna Cum Laude from Harvard University with a BA in Psychology and Social Relations.
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There is a lot of buzz around fee disclosure but no final regulations. However, between lingering 408(b)(2) regulations from last year and legislation in Congress, it’s not clear what will ultimately happen in this area (see “Fees Are the Word“). What can plan sponsors and their advisers do now? Jason Roberts, an attorney with Reish Luftman Reicher and Cohen, expects that legislation and regulation around fee disclosure will come to fruition, even if it’s reworked. “In a nutshell, what we’re really at is full disclosure,” he said. Roberts said he is recommending that service providers use 408(b)(2) regulations as guidelines for what should be disclosed, until further regulations are proposed or finalized.
Ironically, implementing fee disclosure will make fees go up, noted Bridget Hagan, senior director of government relations at Nationwide. Another trend that could come out of more fee disclosure is more awareness around fees—which could actually lead to less litigation around the issue, suggested David Levine, principal at the Groom Law Group Chartered. “There is a growing realization that plans are not free,” he said.
Automatic Enrollment, Target-Date Funds
Automatic enrollment is popular with Congress, Hagan said. Legislators are likely to consider more in that area, possibly including mandatory automatic enrollment. President Obama’s budget proposed that companies with 10 or more employees that have been in business for more than two years that did not offer a 401(k) or other qualified retirement plan would have to automatically enroll their participants into IRAs (see “President’s Budget Aims to Boost Retirement Savings“). Although legislation in support of that notion this year has not yet been introduced, the concept stems from a bipartisan proposal dreamed up in a think tank years ago—which has received bipartisan support on Capitol Hill, noted Hagan.
In light of market turmoil, the varying composition of target-date funds have come under the microscope. Hagan expects there to be guidance from Washington about them this year. The Securities and Exchange Commission (SEC) and the Department of Labor (DoL) are set to hold a hearing about target-date funds this month (see “More Details Released about Target-Date Hearing” and “401(k)s to Stay, but Expect Changes“).
Investment Advice
The effective date of investment advice regulations, which updates the Pension Protection Act’s guideline for advice, were recently pushed back by the Department of Labor (see “EBSA again Extends Effective Date of Advice Rule’). Will they ever really happen? “It’s very possible that [those regulations] will never see the light of day,” said Levine.
Furthermore, that issue has been taken up by Congress in recent legislation introduced by Congressman Rob Andrews (D-New Jersey) that seeks to bar so-called “conflicted” advice, or advice given by investment advisers who do not receive level compensation (see “Andrews Legislation Raises Question“).
Roberts noted that the common feeling on Capitol Hill is that advice is good when it is done right. Regardless of what happens with the regulations and the legislation, advisers who are already independent will not really be affected.
Guaranteed Income
As participants saw huge losses this year, creating a guaranteed income stream has been in the spotlight. Providers have developed several retirement income products in the last couple years, some of which can be embedded in plans (see “The Inside Story“).
Hagan noted that those products are difficult to communicate to participants because of their complexity; it might require a mandate in order to implement them. However, while there is an appetite for regulation around this, it is not high on Washington’s agenda. As Roberts said, while he expects to see fee disclosure regulation, regulation around guaranteed income products is not quite there yet.
It might not be clear what is coming down the road, but one thing seems clear, panelists noted: To use a catchword of the year, “change” is near.
